How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Old Dominion Freight Line (
ODFL Quick Quote ODFL - Free Report) ten years ago? It may not have been easy to hold on to ODFL for all that time, but if you did, how much would your investment be worth today? Old Dominion Freight Line's Business In-Depth
With that in mind, let's take a look at Old Dominion Freight Line's main business drivers.
Old Dominion Freight Line, founded in 1934, is a leading LTL company. The company based in Thomasville, NC, offers LTL services on a regional, inter-regional and national basis. The services are inclusive of ground and air expedited transportation, apart from consumer household pickup and delivery through a single integrated organization.
The company also offers LTL services across North America through strategic alliances. Additionally, it provides value-added services like container drayage, truckload brokerage, supply chain consulting and warehousing. The company operates multiple service and maintenance centers.
While bulk of the centers is owned by the company, the remaining are leased. The service centers are endowed with responsibility pertaining to the pickup and delivery of freight locally. Moreover, the maintenance centers are responsible for performing operations that are related to the routine and preventive maintenance as well as repairs of the company’s equipment. Old Dominion’s infrastructure allows for smoother freight transportation offering next-day and second-day service through each of its regions across the United States. Over the past several years, the company has opened numerous service centers which have increased capacity across its service network. This in turn places the company for future growth prospects. The company constantly works towards improving customer service by increasing on-time performance and reducing cargo claims. It primarily focuses on increasing shipments and tonnage growth in order to generate higher revenues. The company faces primary competition from regional, inter-regional and national LTL carriers. It also faces secondary competition from truckload carriers, small package carriers, airfreight carriers and railroads. Owing to the betterment in scenario in 2021, total revenues increased 30.9% year over year to $5.26 billion. LTL service revenues were up 30.7% and accounted for bulk of the top line (98.6%). Remainder of the top line was generated from non-LTL revenues. Notably, LTL tons increased 15.4% year over year with LTL shipments rising 18.5%. Moreover, LTL weight per shipment, excluding fuel surcharges, increased 6% in 2021. Moreover, the company’s fiscal year coincides with the calendar year. Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Old Dominion Freight Line ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in March 2012 would be worth $15,251.84, or a gain of 1,425.18%, as of March 17, 2022, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 210.35% and gold's return of 11.60% over the same time frame.
Looking ahead, analysts are expecting more upside for ODFL.
Old Dominion's efforts to add shareholder value are impressive. In 2021, the company paid dividends of $92.4 million and repurchased shares worth $599 million. Improvement in the operating ratio (operating expenses as a percentage of revenues), owing to higher revenues, is encouraging. With improved freight market conditions, rise in LTL (Less-Than-Truckload) shipments is driving the top line. Revenues increased 30.9% year over year in 2021. However, high capital expenditures might be an overhang. Capital expenditures for 2022 are likely to be $825 million compared with $550.1 million in 2020. Moreover, high operating expenses pose a threat to Old Dominion's bottom line. Total operating expenses rose 24.4% in 2021 mainly due to rise in costs pertaining to salaries, wages & benefits and escalation in operating supplies & expenses.
Over the past four weeks, shares have rallied 8.79%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.